Maharashtra Hikes Excise Duty on IMFL by 50%: United Spirits, Radico Hit; GM Breweries, Sula Vineyards Gain Big

Maharashtra’s sweeping excise duty hike on liquor, the most significant since 2011, has triggered a sharp sell-off in liquor stocks while sparking a contrasting rally in beer and wine producers.

The state cabinet, chaired by Deputy Chief Minister Devendra Fadnavis, has raised the excise duty on Indian Made Foreign Liquor (IMFL) from three times to 4.5 times the manufacturing cost-an effective 50% jump for products with a manufacturing value of up to ₹260 per bulk litre. The duty on country liquor has also surged from ₹180 to ₹205 per proof litre.

Market Reactions: Liquor Stocks Plunge, Beer and Wine Gain

On June 11, 2025, the Bombay Stock Exchange witnessed a sharp divergence. Major liquor players - United Spirits, Radico Khaitan, Allied Blenders, and Som Distilleries saw their shares tumble by up to 6%.

United Spirits, which derives 20-22% of its overall sales from Maharashtra, was hit particularly hard, with analysts projecting a 6-8% impact on its earnings per share (EPS). Radico Khaitan, with 7-8% of sales from the state, could see a 2-3% EPS hit.

Conversely, GM Breweries’ shares increased by over 18%, while Sula Vineyards rose by 8%, as the excise duty hike excluded beer and wine, positioning these companies as relative winners amid the regulatory storm. The market’s split reaction underscores the sectoral nuances and the varying impact of state policy on different alcohol categories.

Price Surge: Consumers to Bear the Brunt

The new duty structure is set to cascade through to consumers. The minimum retail price for a 180 ml bottle of country liquor has risen to ₹80 from ₹70, while IMFL prices for the same quantity have leapt to ₹205 from ₹110-115.

Premium foreign liquor now starts at ₹360, up from ₹210. Analysts estimate that the maximum retail price (MRP) of IMFL could increase by 30-50%, the steepest hike by percentage since 2011.

Maharashtra Emerges as Crucial Frontline in India’s Liquor Market Shift

Maharashtra accounts for 10-12% of India’s total liquor industry volume, making it a pivotal market for national players. The state’s regulatory changes are expected to generate an additional ₹14,000 crore annually for the exchequer, but the immediate impact on consumer demand and company margins remains a key concern.

Regulatory Reset: Maharashtra’s Liquor Overhaul Introduces AI Surveillance, MML Category, and Sector-Wide Impact

The state cabinet has also introduced structural reforms to tighten oversight and curb illicit trade. A new AI-enabled integrated control room will monitor distilleries, manufacturers, and wholesalers, aiming to improve transparency and regulatory efficiency. Additional divisional and superintendent offices will be established in Mumbai, Thane, Pune, Nashik, Nagpur, and Ahilyanagar to strengthen enforcement.

A novel category - Maharashtra Made Liquor (MML)- has been created, exclusively for grain-based spirits produced by state-based manufacturers, with a minimum price of ₹148 for a 180 ml bottle. This move is designed to boost local industry and expand the state’s revenue base.

Broader Implications for the Sector

The duty hike is expected to dent sales volumes for liquor companies in Maharashtra, especially for IMFL and country liquor. With consumers facing higher prices, a shift towards lower-priced or illicit alternatives cannot be ruled out, posing additional challenges for both regulators and legitimate producers.

For beer and wine producers, the exemption from the duty hike provides a competitive edge, likely to be reflected in improved margins and market share gains in the near term. The contrasting fortunes of liquor and beer/wine stocks highlight the importance of regulatory clarity and sector-specific policy impacts.

Conclusion

Maharashtra’s excise duty revision marks a watershed moment for the state’s liquor industry, with far-reaching implications for market dynamics, consumer behaviour, and corporate earnings.

As companies adapt to the new pricing landscape, the focus will shift to innovation, cost management, and regulatory engagement. For investors, the episode serves as a stark reminder of the sector’s vulnerability to policy shocks and the value of diversification across alcohol categories.

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